Major lender shuts down wholesale division

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A major lender has shut down its wholesale division.

Fifth Third Bank has sent a communique to affected originators, with president of Fifth Third Mortgage Company Bob Lewis confirming the lender would shut down its wholesale division and focus on correspondent lending.

"As you are aware, there have been significant changes within the mortgage industry over the past several years. Fifth Third conducts regular reviews of the industries we serve based on the changing competitive and regulatory environment. Based on the current environment, and after careful consideration, we have decided to exit the wholesale business and focus third-party origination on correspondent lending," the memo said.

Lewis said the bank was looking to "build on our leadership position in the corresponding market" and would remain committed to purchasing loans from independent mortgage companies and smaller financial institutions, but that Fifth Third would be terminating its broker agreements as of March 14.

"Please consider this official termination, effective March 14, 2014, of your Residential Wholesale Loan Broker Agreement with us. We are committed to working closely with you to ensure that loans currently in the pipeline are fulfilled and processed for your customers. New registrations will be accepted through March 14, 2014, and we will continue accepting applications until March 31, 2014."

COMMENTS

by Chris| 3/11/2014 12:22:32 PM

As a wholesale broker, it's definitely getting scary out there for us and I feel for all the people that are out of a job because of them exiting---but in saying that....5th 3rd was brutal to work with compared to other lenders out there

by Herb McGee| 3/11/2014 12:25:35 PM

If you can't stand the heat, get out of the kitchen.

by Georgia Mortgage Guy| 3/11/2014 12:27:26 PM

Their process was the worst anyway- I am shocked that stayed in as long as they did- Offshore Underwriting was the worst-